Comment However with colocation ... (Score 1) 76
The security of the stock exchanges is really pretty bad. Low latency access means no firewalls and few application level checks. For the longest time people were sending ethernet raw packets...There is a perverse incentive not to properly secure exchanges because security is slow.
Technically true. However in the quest for low latency there has been a tendency for some to colocate with the exchange. So if an exchange system and a broker system are in the same high physical security room and have a direct connection between them then the risk is mitigated to a degree.